Types Of Small Business Loans

When running a business, handling your finances correctly is obviously one of the most important differences between making a profit or going bankrupt. However, for most business people there are times when you’re faced with expenses that can’t be covered by any savings that you may have sitting in the bank. At such a time, you may need one of the many small business loans available from the banks and finance companies.

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Start Up Loans – As the name suggests, this is the often the first business loan that people apply for and it gives them the initial capital they need to jump start their venture in the first place. The money raised by such a loan can be used for things as diverse as buying materials and equipment to get the company going, to hiring the first employees.

Business Expansion Loans – Also known as business growth financing, these loans are for people who already have their business running, but require some additional funding to help it grow.

Loans for Inventories (Inventory Financing) – This kind of small loan is all about ensuring that you have the products or services to meet the demands of your customers. As a business expands, you may find that you struggle to maintain a sufficient inventory to keep your customers happy, hence the need for extra money.

Loans for Equipment and Plant Tools – Whether it is best to hire or buy major pieces of industrial equipment and machinery for your company, you may find that you’ll need equipment financing to cover those costs.

Vehicle Loans – Some form of vehicle financing, whether it be for cars to take staff to and from meetings to trucks to transport products from the factory floor to the showroom, is a common business loan. Talk to your preferred lender as many Australian banks offer both leasing and purchasing loans for their business customers.

Trade Loans – If you wish to expand your business beyond the domestic market into the global space, you may require trade financing for give you sufficient funds to begin exporting or/and importing products. Much of this financing comes through partnerships between the Australian government and regular commercial banks.

Business Property Loans – When you start a business, money is usually tight and so often you have little choice but to lease whatever property you use for your company, be it office space, a shop or warehousing. However, you may reach a point when this no longer works for you and you wish to buy such property outright. When this time comes, unless you have the capital yourself, you’ll need to apply for a business property loan.

Whether you are looking to start a business or grow an existing one, the chances are that at some point you will need a small business loan to take things to the next level. Before you make any major decisions, be sure to check all the small loans available to you and be particularly cautious in choosing a lender and agreeing to both the terms and interest to be paid on the loan. Small loans should always be a steppingstone towards financial solvency, not debt.